Long-run determinants of the Irish real exchange rate
Authors: Lane P. R.; Milesi-Ferretti G.M.
Source: Applied Economics, Volume 34, Number 5, 20 March 2002 , pp. 549-553(5)
Abstract:Smooth adjustment to real exchange rate shifts is one of the major challenges facing the Irish economy under EMU. Rather than assume purchasing power parity, the long-run real exchange rate is modelled as time-varying, being determined by relative output levels, the terms of trade and the net foreign asset position. It is shown that these factors account for a large proportion of the long-run movement in the Irish real exchange rate.
Document Type: Research article
Publication date: 2002-03-20